JONES et al. v. SHAPERA, 57 F. 457

PARDEE, Circuit Judge, (after stating the facts.) The so-called “original answer” is made up of a demurrer to the jurisdiction on the ground that the paper sued on is payable to bearer and payable in the state of Texas, and was made and indorsed and delivered in Texas, and is to all intents and purposes domestic paper, and a plea to the jurisdiction on the ground that the plaintiff was not the real owner of the note sued on, but the same belonged to a citizen of Texas, the transfer being wholly fraudulent and collusive for the purpose of conferring jurisdiction. The demurrer seems to have been abandoned.

The record shows no ruling upon it, and no question about it is made in this court. Evidence seems to have been taken on the plea; and, as recited in the first bill of exceptions, it was shown that the note sued on was made and,delivered to M. IsT.

Rosenthal for value on its date shown by the pleadings; that at the time said Rosenthal was a citizen of the state of Texas, and while still a citizen of said state transferred said note by delivery to plaintiff for value; and it was further shown that in July, 1892, thereafter, said Rosenthal became a citizen of the state of Illinois, and has ever since been a citizen and resident of that state; and thereupon the defendants requested the court to instruct the jury: “

(1) If you believe from tbe evidence tbat M. N. Rosenthal loaned to T. F. Jones money as his own in the state of Texas, for which the note in evidence was given, and said Rosenthal was at the time a citizen of the state of Texas, you will find for the defendants on their plea to the jurisdiction. “

(2) If you believe that at some time before the date of the note sued on another note was executed and delivered to said Rosenthal by defendants for money loaned, and that he was a citizen of Texas, and that thereafter the present note sued on was so executed and delivered by defendants to said Rosenthal in lieu of said first note in part, and that said Rosenthal was a citizen of Texas at the time, you- will find for the defendants on their plea to the jurisdiction.” —Which instructions were refused by the court. There can he no question that these instructions were properly-refused.

The second one does not seem to be at all applicable to the case, so far as any evidence was before the court and jury to support it. The first, if applicable to the evidence, is not sufficiently definite and specific to be adopted as a proposition of law.

The real question presented by the evidence oifered in support of the plea is whether, as the note sued on was originally executed and delivered by the makers and indorsers to Rosenthal, then a citizen of Texas, who afterwards, and while a citizen of Texas, transferred and delivered the same for value to the plaintiff, the said Rosenthal thereafter and before the institution of this suit removing to and becoming a citizen of the state of Illinois, the court Irad jurisdiction on the ground of adverse citizenship to entertain the plaintiffs suit.

The judiciary act of 1887 and 1888 provides as follows: "Xor shall any circuit court nor district court have cognizance of any suit except upon foreign hills of exchange to recover the contents of any promissory note or other chose in action in favor of any assignee or of any subsequent bolder if such instrument be payable to bearer and be not made by any corpora tion, unless said suit might have been prosecuted in such court to recover the said contents, if no assignment or transfer had been made.” In this present case, if no transfer of the note sued on had been made, Rosenthal would have been the owner and holder of the same; and as he was a citizen of the state of Illinois on December 2, 1892, (the date of suit.) he could have brought suit in the court below.

Kirkman v. Hamilton, 6 Pet. 20. The contention of the plaintiff in error is that, as at the time when the transfer was actually made, Rosenthal was a citizen of Texas, the jurisdiction is to be determined by the state of facts then existing, and that Rosenthal’s subsequent change of citizenship cannot confer jurisdiction on the court in behalf of the transferee. In White v. Leahy, 3 Dill. 378, a citizen of Missouri, and assignee of a note, brought suit thereon against the maker, a citizen of Kansas.

The payee, when the note was made, and when he indorsed it to plaintiff, was also a citizen of Kansas, but when the suit was brought he (the payee) was a citizen of Texas; and the court held: “If no assignment of tills note bad been made, the assignor might, being at the lime when the suit was brought a citizen of Texas, have then commenced it; and under tlie statute his assignee has the same right.

If the restriction on the assignor does not exist at the time the suit is commenced the court has jurisdiction if the case involves the requisite amount, and is between a citizen of the state where suit is brought and a citizen of another state.” Chamberlain v. Eckert, 2 Biss. 126, and Thaxter v. Hatch, 6 McLean, 68, are to the same effect. In the case of Mollan v. Torrance, 9 Wheat. 537, which was a case involving the jurisdiction under

section 33. of the judiciary act of 1789, in a suit brought by an indorsee of a promissory note against the indorser, a resident of the same state as the maker of the note, Chief Justice Marshall says: “It is quite clear tlie jurisdiction of Hie court depends upon the state of ■tilings at the time of the action brought, and that, after vesting, it cannot be ousted by subsequent events.” See, also, Bradley v. Rhines’ Adm’r, 8 Wall. 893.

It seems to be recognized in all the decisions of the supreme court to which our attention had been called that, where in any suit brought by an assignee of a chose in action the citizenship of the assignor was material, it has always been considered with reference to the time when the action was commenced, and this whether the case arose under the eleventh

section of the act of 1789, the judiciary act of 1875, or the judiciary act of 1887 and 1888. See Morgan v. Gay, 19 Wall. 82; Metcalf v. Watertown, 128 U. S. 588, 9 Sup. Ct. Rep. 173; Parker v. Ormsby, 141 U. S. 85, 11 Sup. Ct. Rep. 912. The note sued on in this case, being payable to the makers’ order, and indorsed by them in blank, is, in legal effect, a note payable to bearer. Daniel, Neg. Inst. § 130; Bank v. Barling, 46 Fed. Sep. 357; Steel v. Rathbun, 42 Fed. Sep. 890. In Bullard v. Bell, 1 Mason, 247, Mr.

Justice Story said: “A note payable to bearer is often said to be assignable by delivery, but in correct language there is no assignment in the case. It passes by mere delivery, and the holder never takes any title by or through any assignment, but claims merely as bearer. The note is an original promise by the maker to pay any person who shall become the bearer.

It is therefore payable to any person who successively holds the note bona fide; not by virtue of any assignment of the promise, but by an original and direct promise moving from the maker to the bearer.” This doctrine is indorsed by the supreme court in Thompson v. Perrine, 106 U. S. 589-593, 1 Sup. Ct. Rep. 564, 568.

In the matter of showing jurisdiction on the record between the cases where one sues on a note payable to an individual or order and where one sues on a note payable to bearer, the difference is that in the former the plaintiff; if an assignee of the payee, must allege a proper citizenship on the part of his assignor, but in the latter the plaintiff, if a subsequent holder, may disregard the original holder, leaving the citizenship of the latter, if affecting the jurisdiction, to be pleaded by the defendant.

It follows that the first and fourth assignments of error in this .case, relating to the jurisdiction of the court, and to the necessity of the same appearing affirmatively on the record, are not well taken. The plaintiff sued 'Travis F. Jones and Jones & Bro. as the makers and indorsers of the promissory note set forth in the petition. The answer admits the making of the said note as alleged. The note offered in evidence, and which, by order of the circuit court, has been sent up with the transcript, purports to be a note made and indorsed by Travis F. Jones and Jones & Bro.

It is true that in the signature of Jones & Bro. two- kinds of ink appear to have been used, but we cannot say, upon inspection, that there is any variance between the note sued on and the one offered in evidence. The evidence of Travis F. Jones, as set forth in the bill of exceptions, was not admissible under any issue made in the case. See artich 1265, Rev. St. Tex. The authorities cited by tlie learned counsel for plainiiif in error — Park v. Glover, 23 Tex. 470; Collins v. Ball, 82 Tex. 259, 17 S. W. Rep. 614 — do not apply.

On the whole case we find no reversible error, but we are not prepared to say that the ease of the plaintiffs in error is frivolous, or was brought to this court for delay. The judgment of the circuit court is affirmed, with costs.